Violation of the federal Safeguards Rule, designed to protect customer privacy, could cost dealers fines of $11,000 a day, warns the dealership CPA firm of Carpenter, Mountjoy & Bressler, Covington, KY.
The Federal Trade Commission, the agency enforcing the Safeguards Rule, is conducting audits at dealerships, according to Chip VonLehman, CPA with Carpenter, Mountjoy.
He recommends regular monitoring, evaluating and potential adjusting of the shield program. “Most importantly, keep the documentation every step of the way,” he says.
The Safeguards Rule is part of the far-reaching Gramm-Leach-Bliley Act. It stipulates three broad objectives that each dealer program needs to maintain for providing financial products and service to customers. They are:
- Ensure the security and confidentiality of customer information.
- Protect against unauthorized access to or use of information that could result in any substantial harm or inconvenience to any customer.
- Guard against any anticipated threats or hazards to the security or integrity of the information.